Commission staff working paper on certain legal aspects relating to cinematographic and other audiovisual works.

Legal base:



Document originated:

11 April 2001

Forwarded to the Council:

11 April 2001

Deposited in Parliament:

4 May 2001

Department:

Culture, Media and Sport

Basis of consideration:

EM of 10 May 2001

Previous Committee Report:

None

To be discussed in Council:

No date set

Committee's assessment:

Politically important

Committee's decision:

Not cleared; further information requested

Introduction

13.1 The Commission has issued this working paper
to stimulate a debate on a number of legal and technical issues
concerning the audiovisual industries. It has invited views from
all interested parties by 11 July. Later in the year it will follow
this up with a Communication. The paper follows an undertaking
given by the Commission in its 1999 Communication Principles
and guidelines for the Community's audiovisual policy in the digital
age, to monitor the current regulatory framework closely,
with a view to adapting it where necessary. We concluded that
that document and the draft Council Conclusions on it adopted
by the May 2000 Culture/Audiovisual Council were relevant to any
debate on the audiovisual content industry.[19]

13.2 The paper poses a wide range of questions
but does not set out any particular views or propose any specific
course of action. The Commission stresses that the issues raised
are not intended to be a complete list at this stage but cover
points which the audiovisual industry considers have an impact
on the circulation of European audiovisual works. The intention
is to assess their importance and to decide if there is any need
to take action, whether at a regional, Member State, Community
or international level.

The issues

 The definition of a European work

13.3 Different definitions operate at the international
level, the Community level and the national level. For example,
current definitions include those in the Council of Europe Convention
on Cinematographic Co-Production, in the Television without Frontiers
(TVWF) Directive,[20]
which is the reference for the Media programme, and in
the Eurimages programme. A further variety of definitions
is used at Member State level, both in implementing the TVWF Directive
and in applying national support schemes. Apart from affecting
financial support, these definitions affect co-production agreements.

13.4 The Commission suggests that the following
questions should be considered in this context:

" do the
differences between the different definitions for 'European works'
adopted at Member State level create barriers to the transfrontier
production of European audiovisual works and to their circulation?

" do the criteria in the Television
Without Frontiers Directive and the guidelines under the Media
programme, as applied at national level, provide sufficient legal
certainty for operators?

" would there be an added value in
the adoption of a more detailed definition in Community law?

" [if] in the affirmative, which
criteria should be adopted (e.g. 'cultural' aspects or other elements
such as the sources of financing and/or control of rights)?

" should such a definition of a European
work be used in contexts other than that of the Television Without
Frontiers Directive and the Media programme? (e.g., application
of Community competition rules)."

 The definition of an "independent
producer"

13.5 Article 5 of the Directive provides
that broadcasters should reserve a certain proportion of transmission
time, or of their programming budget, to European works created
by producers who are independent of broadcasters. Recital 31 of
the Television without Frontiers Directive, as amended,[21]
states that it is essential that the Community ... should promote
independent producers and that Member States, in defining the
notion of 'independent producer' should take appropriate account
of criteria such as the ownership of the production company, the
amount of programmes supplied to the same broadcaster and the
ownership of secondary rights.

13.6 The Commission notes that, here too, a number
of different definitions are in use across Europe. One question
that arises is whether national definitions that do not reflect
the technical development of the sector, such as digitalisation
and competition between different methods of distribution such
as cable, satellite and the internet, might give rise to competition
problems, if the criteria are not neutral in any given market.

 Protection of heritage and exploitation
of audiovisual works

13.7 The Commission says that a number of different
issues have been raised concerning the need to safeguard Europe's
audiovisual heritage as well as to promote public access to it,
taking advantage of the new digital technologies. Three different
issues which have been identified by the industry as potential
areas of added value for action at European level in terms of
protection of rights, transparency, and effective exploitation
are:

 The legal deposit of audiovisual works

13.8 A Council Resolution adopted in May 2000[22]
called on the Commission to "take account of the specific
needs of this particular form of cultural legacy, and to support
and encourage a transnational study on the situation facing European
cinema archives".

13.9 The Council of Europe has prepared a draft
European convention which would provide for compulsory legal deposit
of "moving image material forming part of its audiovisual
heritage and having been produced or co-produced in the territory
of the party concerned". The International Federation of
cinema producers associations (FIAPF) supports a "voluntary"
deposit for cinematographic works.

13.10 Questions raised in this context include:

is there a need for regulatory intervention?

should there be a European scheme, to provide
legal certainty, which would entail a compulsory requirement,
or a voluntary one, for the deposit of a physical copy of an audiovisual
work and, in either case, which types of such works should be
covered?

 The creation of a registration scheme

13.11 Only a minority of Member States have set
up a register for films and other audiovisual works. An initiative
to create an international register under the World Intellectual
Property Organisation (WIPO) has met with only limited success.

13.12 One of the questions raised in this context
is:

would there be added value in a European approach
in terms of feasibility and/or legal certainty, transparency and
protection of rightholders?

 A rightholders database

13.13 This would be different to the registry.
It would enable the identification, for commercial purposes, of
rights or licensing agreements across the EU. Information on who
holds the rights for the various territories can be difficult
to obtain in the European market, which is still fragmented.

 The exploitation of rights

13.14 The Commission says that the questions
raised by this issue include:

are all there difficulties in identifying rightholders
which hinder the showing of audiovisual works?

what would be the most efficient way of overcoming
these difficulties, taking into account the advantages or disadvantages
of different options, such as negotiating with collecting societies
or creating a fund?

how would an assessment of remuneration be carried
out, and by whom?

 Other issues

 delivery, such
as on-line rights

One question here is whether there is a need to consider
rights by categories, such as TV or Internet.

 e-cinema

The standardisation of electronic delivery to cinema
screens, for instance by video, is currently being considered
by the Commission. It questions whether there is a need for European
action on this and, if so, what sort of action?

 tax issues

Books are subject to a reduced rate of VAT whereas
audiovisual products, such as video cassettes and DVDs are subject
to the normal rate. Member States operate a wide range of financial
incentive schemes, from grants to tax advantages. The Commission
questions whether there is a need for action at EU level and,
if so, how might the fiscal measures in operation in Member States
be modified to improve the production and circulation of audiovisual
works.

 ratings

The Commission believes that there is a need for
a coherent approach. At the moment the different rating systems
applied within and between Member States constitute an impediment.
In some Member States, even when films have been released and
classified, videos are subject to a separate rating, incurring
additional expenses, separate administrative procedures in each
country, the need to manufacture specific packaging and, sometimes,
to create specific versions of the original.

The Government's view

13.15 The former Minister for Tourism, Film and
Broadcasting, Janet Anderson, says in an Explanatory Memorandum
dated 10 May, that the Department for Culture, Media and Sport
is co-ordinating consultations within Government and the film
and broadcasting industries. The extent and nature of the questions
posed raise issues which could, she says, have a significant impact
on these industries. She expects them to be "extremely interested"
in the paper and to respond accordingly.

13.16 The Minister says that a formal UK Government
response will be sent to the Commission before the 11 July deadline.
Until the consultation with all the interested parties is complete,
it is not possible for the Government to assess the likely policy
implications. She promises a further Explanatory Memorandum outlining
its response to the Commission.

Conclusion

13.17 The Minister has drawn attention to
the significant impact which the resolution of the issues raised
in this consultation document could have on the film and broadcasting
industries in this country. We accept that the policy implications
cannot be fully assessed until the Government's own consultation
is complete and look forward to her Supplementary Explanatory
Memorandum on its response to the Commission. If the industries
affected react as she predicts, recognising the significance of
the issues raised, we are likely to recommend this document for
debate in European Standing Committee C, together with the two
documents already noted as relevant to such a debate to which
we refer in paragraph 13.1 above.